Rapid Fire March 9, 2012: Purchasing Power Opacity

• The Australian DoD announced the allocation of construction work for the third ship of the $8 billion Air Warfare Destroyer (AWD).

• Earlier this week India debarred 4 foreign companies – Israel Military Industries (IMI), Singapore Technologies Kinetics Ltd, Rheinmetall’s Air Defence Swiss subsidiary, and Russia’s Corporation Defence (aka Corporation Zashchita) – and 2 local ones – RK Machine Tools Ltd and TS Kisan and Co Private Ltd – from doing business with its Ministry of Defence for 10 years. Apparently this will affect the whole ministry in practice though not in the legal fineprint.

ST Kinetics first complained that allegations to that effect were made since 2009 despite a lack of any formal charges until now. The company then confirmed it received official notification from the Ordnance Factory Board (OFB) which only affects an NDA signed a few years ago, as the firm has not won any defense contract in India. Meanwhile Israel’s defense ministry expressed its surprise and is reviewing how to proceed with IMI.